Stocks

Nikkei hits over 1-week high on easing North Korea tensions

Reuters Tokyo | Updated on March 09, 2018 Published on March 09, 2018

The Nikkei rose as much as 2.4 per cent to 21,884.45 in midmorning trade.

Japanese stocks rose to a more than one-week high on Friday, tracking broader gains across Asian equities, as tensions over North Korea eased after US President Donald Trump agreed to a meeting with Kim Jong Un that could come before May.

The news lifted the risk sentiment, pushing most sectors into positive territory, but defence-related stocks, which had risen when North Korea fired missiles last year, lost ground.

Asian markets were also underpinned by Trump's softer-than-expected stance on trade tariffs, easing trade war fears that have kept the market on edge for a week.

Trump had pressed ahead on Thursday with import tariffs of 25 per cent on steel and 10 per cent for aluminium, but backtracked from an earlier “no-exceptions” stance and exempted Canada and Mexico and offered the possibility of excluding other allies.

The Nikkei rose as much as 2.4 per cent to 21,884.45 in midmorning trade, the highest since March 1, before trimming gains to end the morning market up 0.9 per cent at 21,554.67. The benchmark index has risen 1.8 per cent so far this week.

“The Japanese market's sentiment was relatively vulnerable when North Korea launched missiles last year compared to asset classes in other regions, so the news that the two leaders will be meeting is very positive, at least for the short-term,” said Hikaru Sato, a senior technical analyst at Daiwa Securities.

“But how much we can expect from the meeting is still up in the air ... North Korea had a hard line stance on its nuclear program. The market is still not fully convinced that discussion will go smoothly...”

Friday's winners included such large cap stocks as Fast Retailing, rising 1.5 per cent, SoftBank, up 1.6 per cent, and Daikin Industries, up 2.3 per cent. Insurers were also bought, with T&D Holdings up 1.6 per cent and Sompo Holdings rising 2.3 per cent.

On the other hand, defence equipment maker Ishikawa Seisakusho tumbled 11 per cent, firearm maker Howa Machinery sank 11 per cent and health protection devices maker Shigematsu Works fell 8.8 per cent.

The broader Topix rose 0.6 per cent to 1,719.97.

Published on March 09, 2018
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